Tubacex, S.A. · BME:TUB
Tubacex — Investor Presentation (2019)
42 slides from Tubacex's investor presentation, Jul 11, 2019
Slide 1: Corporate Presentation 2019
CORPORATE PRESENTATION 2019
Slide 2: Tubacex Group, Recent Evolution, Outlook & Results, Strategic Plan
Tubacex Group Recent Evolution Outlook & Results Strategic Plan 2016-2020
Slide 3: Tubacex Group
Tubacex Group Recent Evolution Outlook & Results Strategic Plan 2016-2020
Slide 4: A fully integrated supplier
TUBACEX Group A fully integrated supplier Pipes & tubes Commercial Steel billets & bars Extrusion Cold finishing fittings Master network distribution TUBACEX is the largest Seamless Stainless Steel Manufacturer.. Corporate Presentation 2019 4
Slide 5: Geographical Presence
TUBACEX Group Geographical Presence KEY FACTS Sales > 500 million euros 11 mills in Spain, USA, Austria, Italy and India. Investment of €160 million in the last 5 years Commercial presence in over 14 countries More than 300 customers in over 100 countries. 2300 professionals Worldwide
Slide 6: Business Strategy: Market Growth
TUBACEX Group Business Strategy Traditional Products Higher Added Value Products + Off- shore Umbilicals Market Growth SC OCTG Boilers Urea Precision High Alloys Furnaces Std Heat Downstream Exchangers linepipe Nuclear Std Bar - Boilers - Profitability + Focus on customer service and Continue our te
Slide 7: Other key matters
TUBACEX Group Other key matters Relationship with Investors Shareholder Structure Stable core of shareholders committed to the long-term project JM Aristrain 11,0% EDM 5,1% One new significant shareholder in 2018: Santalucía AZValor 5,1% Ecofin 4,9% 64% of analysts with active Itzarri 3,2% coverage
Slide 8: Recent Evolution
Tubacex Group Recent Evolution Outlook & Results Strategic Plan 2016-2020
Slide 9: Evaluation of 2018
Recent Evolution Evaluation of 2018 The expected recovery has not taken place: Third consecutive year of the most serious crisis in the Oil&Gas sector Dramatic reduction of the Capex in the industry, causing an unprecedented fall in the volume produced and intense price competition We have imp
Slide 10: Oil Sector
Recent Evolution Oil Sector For the first time in 30 years we have faced three consecutive years of reduced investments, which together with the decline rate of mature assets allow us to forecast a change in the trend in 2018 Contracts award Upstream Capex Growth 120% 40 33 100% 29 100% 83% 30 24
Slide 11: Oil Sector: industry integration
Recent Evolution Oil Sector There has been an integration movement in the sector aimed at reducing the total operating costs Major transactions in the oil & gas industry since Jan. 2014 120 Brent crude spot Price FOB ($/B) Wood Group-Amec Trican-Canyon FW Noble-GE Helix-OneSubsea-SLB TGS-SLB 100 F
Slide 12: Oil Sector: break-even prices
Recent Evolution Oil Sector The adjustments made in the industry during the crisis have reduced the break-even point of many projects which are now profitable with lower oil prices Offshore costs evolution Half Cycle Breakeven Oil Price 58.5 50.2 46.3 …but also helped to improve efficiency Sourcee
Slide 13: Sales breakdown by sector
Recent Evolution Sales breakdown by sector* E&P Oil & Gas: – Despite the cuts in the Capex of oil companies 5% 1% 3% 3% some specific big projects awarded that helped 22% 16% the gradual increase 26% – Transformational projects awarded 48% – Better relative performance of the gas sector 29% Powe
Slide 14: Revenues Breakdown by Geography
Recent Evolution Revenues Breakdown by Geography 58% 56% 34% 32% 9% 8% 1% 2% USA & Canada Europe Asia Rest of World Geographical distribution of sales Final destination for Project market Asia remains the biggest market for the Group Corporate Presentation 2019 14
Slide 15: 2017 in line with 2016 excluding adjustments
Recent Evolution 2017 in line with 2016 exluding adjustments €M 2016 2017 % Var Sales 494.0 490.4 -0.7% EBITDA 34.9 25.9 -25.8% It includes non-recurring extraordinary EBITDA margin 7.1% 5.3% adjustments EBIT 2.5 -28.3 n.m. EBIT margin 0.5% neg. Net Profit 0.5 -19.7 n.m. TUBACEX has registered Net M
Slide 16: Main figures evolution
Recent Evolution Main figures evolution Revenues (€M)* EBITDA (€M) EBIT (€M) 752 64 51 44 46 49 32 12% 27 9% 35 16 532 575 612 554 557 534 6% 20 2 9% 7% 5% 26 -28 2012 2013 2014 2015 2016 2017 -30 2012 2013 2014 2015 2016 2017 (1) 2012 2013 2014 2015 2016 2017 * Figure assuming nickel stable EBITDA
Slide 17: Financial Strategy
Recent Evolution Financial Strategy NFD / EBITDA Cash Flow before acquisitions 118€M generated in 5 years 9,8x 68 5,7x 5,9x 70 47 4,5x 50 37 3,8x 14 2,4x 30 -25 -47 10 0,0x -10 -30 2012 2013 2014 2015 2016 2017 2012 2013 2014 2015 2016 2017 -50 Gross Cash flow Financing 47.2€M of work 383€M generate
Slide 18: Outlook & Results
Tubacex Group Recent Evolution Outlook & Results Strategic Plan 2016-2020
Slide 19: Positive macroeconomic indicators
Outlook & Results Positive macroeconomic indicators Crude Futures ($/bbl) OECD crude oil stocks(mb) Demand vs. Supply (mb/d) Consumption vs. Reserves Corporate Presentation 2019 19
Slide 20: Positive macroeconomic indicators: CAPEX
Outlook & Results Positive macroeconomic indicators SOURCE: Visiongain SOURCE: Oil&Gas UK Positive evolution of CAPEX Corporate Presentation 2019 20
Slide 21: Recovery first evidences
Outlook & Results Recovery first evidences 1. Increase in imports in the USA 4. Gap in Decline Range vs. Demand Range 2. Increase in CAPEX in the OEM’s 5. Rise in raw material prices 3. Rise in price per barrel 100% 83% 58% 45% 2014 2015 2016 2017E Contracts awarded for Upstream, Midstream, Downstre
Slide 22: Initial signs of recovery
Outlook & Results Initial signs of recovery The North Sea has undergone the biggest fall in percentage demand than any other region. However, this trend is starting to be reversed in 2018. Change in tendency in the Middle East with incremental CRA needs due to the prevalence of sour gas North Se
Slide 23: Market Positioning Strategy
Outlook & Results Market Positioning Strategy 1 Move commodity product to plants in Asia (India, Thailand) Develop sale of commodity product through own TSS – Master Distributor network Sale of Premium products directly to End Users and EPC’s 2 Offer the largest range of products on the mark
Slide 24: Business Strategy
Outlook & Results Business Strategy Added Value Premium Products 2012 2017 Premium Value Chain 40% 40% Standard Margen OEM 60% 60% EPC % in euros of Premium products over total consolidated revenues Fabricators 2017 Pack. New Products 2012 80% Compilers 70% 60% Distribut. 50% 40% 52% 30% 35% Type of
Slide 25: Management Strategy
Outlook & Results Management Strategy 1 Establish the management methodology New organization focusing on the Income Statement. < Cost New “Business Unit Trading” Financial Management 2 Industry 4.0 – Big data Process Automation Robotization Use of sensorization in products Tube by t
Slide 26: Development Strategy
Outlook & Results Development Strategy 1 Connections Hydraulic connections Fittings, Tees, Caps Use of welding 2 Services New coatings – Coatings Bending, welding, machining, etc. After-sales service Sequencing Product assembly services Testing, life expectancy testing (EIC) 3 Other
Slide 27: Innovation Strategy
Outlook & Results Innovation Strategy Strategy focused on client to increase global efficiency of his projects and processes Transforming the most demanding needs into customized solutions of high technological value developed in co-creation with customers Six patent applications in 2016-2017 an
Slide 28: Strategic Positioning
Outlook & Results Strategic Positioning With our market positioning and maintaining the improvements in Productivity and Efficiency and the effort in Innovation, all under the EFQM excellence model Our Vision: TO BECOME A SUPPLIER OF PREMIUM TUBULAR SOLUTIONS Corporate Presentation 2019 28
Slide 29: Outlook for the short-term
Outlook & Results Outlook for the short-term Gradual recovery of the market Partial recovery of the base prices Increase in the price of raw materials Important year for the launch of new products / businesses Good positioning for new long-term contracts currently under negotiation Inten
Slide 30: Revenues and EBITDA evolution
Outlook & Results Revenues and EBITDA evolution Revenues 210 192 180 168 160 159 140 147 143 140 150 136 131 129 123 121 128 120 112 119 120 105 110 90 60 30 0 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 2014 2014 2014 2014 2015 2015 2015 2015 2016 2016 2016 2016 2017 2017 2017 2017 201
Slide 31: Main financials
Outlook & Results Main financials 9M 2018 9M 2017 % Var. Q3 2018 Q3 2017 % Var. Mill.€ Revenues 519.9 370.5 40.3% 159.3 129.1 23.4% EBITDA 55.3 24.2 128.5% 19.7 6.6 197.8% EBITDA margin 10.6% 6.2% 12.4% 5.1% EBIT 28.4 0.3 n.m. 12.1 (0.5) n.m. EBIT margin 5.5% 0.1% 7.6% neg. Net Attributable Profit 1
Slide 32: Performance in 2018
Outlook & Results Performance in 2018 Our positioning as supplier of high technological value tubular solutions enable us to show a very significant improvement in results and margins Major order for Iran has been discontinued since 5th November 2018: process managed in an orderly way (no interm
Slide 33: Strategic Plan 2016 - 2020
Tubacex Group Recent Evolution Outlook & Results Strategic Plan 2016 - 2020
Slide 34: Strategic Plan 2013 - 2017
Strategic Plan Strategic Plan 2013 - 2017 Under normal market circumstances, 2015 would have been the year for the consolidation of the Strategic Plan, practically fulfilling the objective set for 2017 If it were not for the oil crisis, we would have fulfilled our Strategic Plan We launch a new pl
Slide 35: We are better positioned for recovery
Strategic Plan We are better positioned for recovery Pre Crisis Crisis 2014 (Proforma) 2016 - 2017 Change Revenues 750 M€ 500 M€ -250 M€ (-33%) Gross margin 370 M€ (50%) 230 M€ (46%) -140 M€ (-38%) EBITDA 82 M€ (12%) 35 M€ (7%) -47 M€ (-57%) Headcount 2.800 2.314 -486 p. # Patents 0 7 +7 Order Intak
Slide 36: Phases in our Strategic Plan
Strategic Plan Phases in our Strategic Plan Starting Strategic Improvement Oil&Gas Crisis Recovery point Target FY 2012 2013-2014 2015-2017 2018 - 2019 2020 - 2021 Product Mix (% 36.2% Premium 60% Premium 70% Premium 27% 70% Premium premium over sales) Products Products Products Sales n.a. +15% -30%
Slide 37: New Perimeter set up during Crisis
Strategic Plan New Perimeter set up during Crisis IBF (Italy) Prakash (India) Awaji (Thailand) Tubacex Upstream Tubacex Services Tubacex Service Solutions Corporate Presentation 2019 37
Slide 38: Significant advance in market positioning
Strategic Plan Significant advance in market positioning New products, services and materials Corporate Presentation 2019 38
Slide 39: Strategic Objectives 2020
Strategic Plan Strategic Objectives 2020 Continue positioning TUBACEX as a global supplier of tubular 1 solutions SUPPLIER OF PREMIUM TUBULAR SOLUTIONS 2 Reduction of the volatility diversifying risks Market Geographic Diversification Product Correct Product Allocation Sector Increase in
Slide 40: Strategic Objectives 2020: EFQM excellence
Strategic Plan Strategic Objectives 2020 Obtain a level of excellence above 500 in the EFQM model 3 (Silver Q for the management model is 400), with all of the results above 50% in both internal and external audits 4 Sustainable and profitable growth that takes us to attractive financial ratios for
Slide 41: Strategic Plan 2016 – 2021: Financial Objectives
Strategic Plan Strategic Plan 2016 – 2021: Financial Objectives Revenues 1,000 M € EBITDA Margin 15% NFD /EBITDA 2-3x Net Working Capital / Sales 35% INTERNAL PROJECTS EXTERNAL PROJECTS Organic growth Development of testing capabilities (EIC) Commercial positioning Agreements with engineerin
Slide 42: Thank you!
THANK YOU! © TUBACEX “GRoup WWW.TUBACEX.COM